Premiere takes 97% stake in Nextmobile for P6.58-B

Shareholders of Premiere Entertainment Productions Inc. have approved the company’s planned acquisition of 97 percent interest in Nextmobile Inc. (formerly Nextel Communications Phils. Inc.) for P6.58 billion.

In a disclosure to the Philippine Stock Exchange, PEP president and chief executive officer Anastacio P. Diaz Jr. said shareholders also approved the change in the firm’s primary purpose from entertainment to telecommunications. In view of this, PEP will be renamed Net Communications Inc.

The acquisition of Nextmobile will be done through the issuance of new PEP shares to be taken from the increase in its capital stock from P500 million to P7 billion. The new capitalization will consist of 14 billion common shares at a par value of P0.50 per share.

The increase follows the reduction of PEP’s authorized capital stock from P1 billion to P500 million by reducing the par value of its common shares from P1 to P0.50. The move is part of the company’s capital restructuring efforts aimed at cleaning up its balance sheet. Nextmobile is owned by a consortium composed of Finnish, Swedish, American and Filipino entrepreneurs led by Mel Velarde.

The acquisition of Nextmobile is in line with PEP’s diversification into the telecommunications and information technology businesses to boost its income.

In light of the continued slowdown in the movie-making industry since 1999, PEP had shut down its film production operations as well as its bingo activities and instead concentrated on the roving cinema and film distribution businesses.

Nextmobile is similarly undergoing a major restructuring and will be concentrating on services different from what Nextel Philippines had focused on, which was in the area of trunked radio, pager and mobile phone services.

The company earlier launched its wireless internet service, Nextel Online, which enables users to surf the internet as well as send and receive e-mail through their handsets.

US-based Nextel International Inc., the parent firm of Nextel Phils., now has minimal ownership in the local company with Filipinos owning majority of the new firm.